For those not following the link, that paper is entitled "The Market for Medical Care Should Work Like Cosmetic Surgery". Having briefly skimmed it, it points out that the costs for cosmetic surgery have not grown nearly as fast as the costs for medical care in general.
The article certainly has its own opinion about why that's the case, but regardless, anyone trying to explain the increase in medical costs should have to address the facts. Cosmetic surgeons still need liability insurance, nurses, office space, medical training, operating room time, etc, etc. So the likelihood that any of those are contributing to rising medical costs is reduced.
It's at -1. I really should not need to explain why a luxury service is not at all analogous to a service that deals with life-threatening, chronic conditions with a population that may not always have the means to pay especially when that payment amount is built off of a shadow market place and several entities which are notorious for not giving a flying shit about people.
Having the means to pay and needing the service for life or death reasons have nothing do with the forces that drive costs down, namely consumers bargain hunting for the lowest price service that offers adequate an level of quality. Neither being poor nor needing a service for a life-or-death reasons. will prevent consumer from bargain hunting. The factors are orthogonal to those that affect cost trends.
You're failing to see that mechanics behind the evolution of consumer markets that lead to prices being driven down. Combined with your rude and arrogant dismissal of the link, your attitude embodies everything that is wrong with our political system and that prevents solutions from being found and implemented.
>You're failing to see that mechanics behind the evolution of consumer markets that lead to prices being driven down.
How so? If anything, I succinctly recognized these so-called mechanics are really just symptoms of other underlying actions and motivations. The PDF wants to pretend like it's looking at market forces, while completely ignoring some fundamental economic theories.
>Combined with your rude and arrogant dismissal of the link, your attitude embodies everything that is wrong with our political system and that prevents solutions from being found and implemented.
Your personal appeals to however insulted you feel or however blunt my response was isn't going to make anything that was stated in your comment or in the link any more substantive than it already is not.
Upon further investigation, the NCPA is a completely biased think-tank whose explicit goals are apparently "to develop and promote private alternatives to government regulation and control." I've never even heard of the NCPA, but the whole contrived tone of the PDF immediately spiked my bullshit meter.
I'm sorry you think you can get away with espousing complete drivel that needs to cherry-pick information to push forward a narrative, contrary to the experiences of the rest of the world. I have a feeling the more and more I'm going to look into this perspective, the less friendly this conversation is going to become. At this point, I have zero tolerance for intellectual dishonesty.
"I succinctly recognized these so-called mechanics are really just symptoms of other underlying actions and motivations. "
I have no idea what that means or what you're referring to. You still haven't addressed any of the arguments I made.
Once more, my response to your argument:
>Having the means to pay and needing the service for life or death reasons have nothing do with the forces that drive costs down, namely consumers bargain hunting for the lowest price service that offers adequate an level of quality. Neither being poor nor needing a service for a life-or-death reasons, will prevent consumers from bargain hunting. The factors are orthogonal to those that affect cost trends.
All you've done is try to justify the unscientific response you provided to my comment, which contains only ad hominem ideological name-calling about the source, rather than addressing the facts it listed and logic it offered.
To recap: you've had a viscerally emotional response, where you engaged in totally rude and intellectually dishonest behaviour against me, all because the argument I made is for the free market, and the party I cited believes in the free market. This embodies everything wrong with our political system.
I did address it, and you are ignoring it. I honestly do not care how insulted you are, or how rude you think I am. You removed any right to be cordially addressed when you pushed non-sense into this board, and then had the audacity to actually treat it as if you were being scientific.
Part of being scientific is asking your own position, "What does this look like if the theory is wrong?" It's called falsifiability. If the PDF you linked had the intellectual capacity and honesty to ask themselves that, then the PDF would have never been published.
Yet you nor the paper have yet to realize, again, some pretty fundamental economic concepts that explain the paper as a whole and why it's completely irrelevant to the conversation at large.
>because the argument I made is for the free market, and the party I cited believes in the free market.
No because they put their blinders on and didn't bother to actually look at any other direction except for the one they wanted to see.
Allow me to be completely straight-forward with my final words: fuck off with your unscientific, dishonest drivel.
> fuck off with your unscientific, dishonest drivel.
We've banned this account for repeatedly breaking HN's civility rule. That's not allowed here.
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>I did address it, and you are ignoring it. I honestly do not care how insulted you are, or how rude you think I am.
That's simply untrue. Where did you address it. Let me reiterate, you have not responded to this:
>Having the means to pay and needing the service for life or death reasons have nothing do with the forces that drive costs down, namely consumers bargain hunting for the lowest price service that offers adequate an level of quality. Neither being poor nor needing a service for a life-or-death reasons, will prevent consumers from bargain hunting. The factors are orthogonal to those that affect cost trends.
This was my rebuttal to your argument, and to date, has not been addressed. You falsely claim you addressed it and then quickly went back to your rude, anti-intellectual ranting.
>You removed any right to be cordially addressed when you pushed non-sense into this board, and then had the audacity to actually treat it as if you were being scientific.
You're displaying an unscientific and demagogic attitude, where you justify belligence with your own subjective determination that a party's argument is "nonsense".
>Part of being scientific is asking your own position, "What does this look like if the theory is wrong?" It's called falsifiability.
That's obvious and doesn't need to be stated. If cosmetic surgery prices had increased as much as procedures in other fields of medicine, that would count as evidence against the theory that a consumer market drives prices down. The article didn't need to pose that question because the evidence doesn't falsify its theory.
>No because they put their blinders on and didn't bother to actually look at any other direction except for the one they wanted to see.
You're making assumptions, not evidence-based arguments.
Like I said, you have not addressed the arguments I've made, and you have behaved like a putelent child, in being rude and trying to justify your rudeness.
Look I get it. I understand how you feel. You see some POS free market ideologue arguing that the free market is what we need in healthcare, when we've all seen that Europe's government run healthcare vastly outperforms the capitalist US healthcare system at a fraction of the cost. You wonder how someone could be so blind to facts, and so indoctrinated by simplistic ideology that is promoted by the American right and its bevy of propaganda-spewing think thanks. You see POSs like this polluting the minds of the public with their pseudo-religous free market dogma, and preventing far better public options - that would save lives and cost less, while guaranteeing universal coverage - from gaining the critical public support needed to be implemented.
I know where you're coming from, and if only you had an open mind, I could explain why your assumptions are wrong.
Isn't it obvious? All of the fields experiencing the cost disease are dominated by government. Either through massive funding, or vast numbers of regulations.
Even within sectors, we see the pattern. For example, the two fields of medicine which have seen the least cost growth are cosmetic [1] and laser eye surgery. Not only have costs risen the least, but the quality of some procedures in these fields has improved tremendously over the last two decades. Both are electives, so there are fewer mandates requiring that they be covered by insurance and fewer redistributive programs to subsidise them.
The source of the complex system dysfunction is the political and social system, which enables special interests to mislead the public in order to implement policies that benefit themselves but have a negative-sum impact on the economy as a whole. One of the 'big lies' that these special interests have succeeded in convincing the public of is that the free market is a misguided ideology that is promulgated by the rich in order to exploit the poor, when in reality it is a basic rule-set necessary for economic development in complex systems (due to properties like the rule-set enabling effective large-scale coordination of economic resources through price signalling, aligning private incentives with the public interest through laws granting and protecting the right to property produced through one's own efforts, or acquired through trade (and inversely, prohibiting acquisition of property through theft, armed robbery and other non-voluntary and predatory means), etc).
The U.S. government seems to be worse than the others.
For instance when Europeans hear how much it costs to build a subway in the U.S. often they are shocked. Heck, the Green Party in my town got shocked when it heard how much it costs to build a bus shelter.
Also government is involved in healthcare in other countries too. The difference is that our government spends more than the others and then the private sector spends more money on top of that.
Thus government itself is not a problem so much as the U.S. government is particularly broken.
Where do you get the idea that government is not involved in subway building in a big way in the US? Perhaps there are more legal/regulatory barriers in place to build a subway in the US than in Europe.
>Thus government itself is not a problem so much as the U.S. government is particularly broken.
The cost disease is affecting all developed economies, not just the US, and it affects almost exclusively government dominated industries. If all governments are broken, then that suggests something inherently wrong with government.
Can you use this model to explain why government-involved health care, education, and subway construction is much cheaper in all other developed countries than in the United States?
I don't know but if I had to speculate, I'd say the US has less efficient government, because of factors like greater wealth (more complacency toward waste and corruption) and a larger and less homogenous population (a less coherent public debate).
With respect to the second point, I hypothesize that generally central economic planning becomes less efficient as the economy it plans grows larger. I suspect this is related to Dunbar's number.
This is critical, because it makes them actually price-sensitive. You can't choose not to have heart disease, though.
Free markets have a bunch of conditions on their efficiency that are often ignored by advocates and don't always apply: must be plurality of non-coordinated buyers and sellers, must be feasible for participants to determine quality of goods (Akerloff's "lemons"), must be low barriers to entry, must be feasible for participants to choose not to do a transaction, and so on.
You can't choose not to eat, yet food prices don't rise like healthcare prices.
I think TFA did a pretty good job showing the difficulty of pinning the problem on market failure, government failure etc. At least any confident explanation must come with numbers and not just passionate words showing where the money went.
> yet food prices don't rise like healthcare prices.
agricultural subsidies and price support (government agrees to purchase unsold surplus of many crops) are a huge contributor here.
also consider the externalities. the price of cheap beef is that 60 years from now a global climate crisis will cost the entire world thousands of trillions of dollars, and probably lots of lost lives as well.
The price trends of food and healthcare couldn't be more different. There's clearly something more than agricultural subsidies at work explaining the difference, given healthcare receives many fold more subsidies. In fact, it's possible that receiving compatively little in sibsidies is one reason that food prices have declined. An even more likely explanation for the price decline of food is that consumers are incentivizes to bargain hunt when buying food, since doing so reduces what they pay, and thus a real consumer-driven market, that rewards efficiency, exists in food. In healthcare, with private/government insurance, there is no incentive for consumers to bargain hunt.
Another factor that likely contributes to the divergence in prices is that healthcare is heavily regulated while food production is not anywhere near as constrained by government mandates.
food production and distribution is also heavily regulated. the USDA inspects farms for safety and sanitation. the FDA inspects food processors for safety and sanitation and inspects food products for safety and purity (whether or not the item in the package is what it claims to be).
I don't know precisely how this compares with the degree of regulation and government intervention in the healthcare sector, but I wish you would try to make a more concrete argument with some examples or citations. as is it really seems as if you're arguing purely from ideology.
The most obvious problem with healthcare prices is that consumers are removed two steps* from paying for it, so there's little price pressure. But it's hard to have an insurance-based system while also providing an incentive to choose a lower cost provider.
* first by insurance, and second by the employer/government paying for the bulk of that insurance
That's why we shouldn't have an insurance based system. Like Ron Paul (who has been a medical doctor since the early 1960s) says, health insurance should be for catastrophic medical events, not for routine checkups and minor ailments and illnesses.
>This is critical, because it makes them actually price-sensitive. You can't choose not to have heart disease, though.
But the sectors experiencing the cost disease do not universally share the property of having inelastic demand. In fact, inelastic demand alone will not make a field price-insensitive. One can still be price conscious when purchasing a non-elective service. Only in the case of an emergency service, where the consumer is not capable of shopping the market is price sensitivity lost.
The biggest source of price insensitivity is government coverage, which eliminates all incentive for a consumer to shop around to find the lowest cost product/service.
>must be plurality of non-coordinated buyers and sellers, must be feasible for participants to determine quality of goods (Akerloff's "lemons"), must be low barriers to entry, must be feasible for participants to choose not to do a transaction, and so on.
Collusion-prone industries are the edge case, not the norm. We have levels of government intervention far in excess of what's needed to prevent abuse in these sectors. Moreover, many of these sectors are collusion-prone due to artificial regulatory costs imposed by government, as well as the intellectual property system created by government, which create barriers to entry that benefit larger economic entities, and lead to many sectors being dominated by a handful of large companies that are in a position of being able to collude with one another.
>must be feasible for participants to determine quality of goods (Akerloff's "lemons"),
> Isn't it obvious? All of the fields experiencing the cost disease are dominated by government
Those are all fields which actually need state involvement. In the graphs you can see that countries with more state involvements are actually doing better. So the bad performance in the USA could be pinned to an avoidance of letting the state do things.
There was no runaway growth in cost when government first started getting involved in those industries in a big way. The cost disease began in all developing economies after large scale government intervention began.
>In the graphs you can see that countries with more state involvements are actually doing better. So the bad performance in the USA could be pinned to an avoidance of letting the state do things.
That's overly simplistic. Government in the US spends more than most developed countries on healthcare per capita so it is not at all clear that it is less quantatively less involved, the until recent lack of universal coverage notwithstanding.
Also, the fact that patients consume far more technologically advanced services, like medical imaging, and experimental and cutting age treatments in the US than in Europe and has to be factored into any analysis on cost-benefit.
This is the solution:
http://www.ncpa.org/pdfs/st349.pdf
It's not a mystery why all of the industries suffering the cost disease are dominated by government.